Published in mint on Apr 08 2014, written by Kapil Mehta
My policy, for which I have paid premium for five years, has lapsed as I did not pay the premium last year. Can I revive it?
—Gayatri Ramanath
Reinstatement rules depend upon the insurer and type of insurance, i.e. whether it is unit-link or traditional. Generally, you will be able to reinstate the insurance after a medical declaration of good health. Some insurers may ask you to do medical tests and charge you interest for a year.
If a life insurance policy was taken for a parent and the parent dies, will the insurer insist on a sibling to sign for the sum assured to be paid, even though a death certificate was sent?
—Ketan Bhagat
In the case of a death claim, the insurer will want to establish that the insured has actually died, there were no non-disclosures or even false disclosures, and the claim has been paid to the nominee specified by the insured. Typically, the nominee submits all this documentation to the insurer and must sign the papers. If the sibling is not specified as a nominee, then she need not sign.
If the nominee is not specified in the insurance, then the insurer will need to establish who the legal heirs are and pay them the benefit. In such cases, a sibling’s signatures and consent are needed.
I was mis-sold an insurance product. I have put in around Rs. 3 lakh in it but I do not want the policy now. Should I exit? —Sofia Das
You will need to do a small analysis to answer this question. Compare the cost of: one, surrendering your insurance immediately; two, not paying any more premiums but withdrawing when surrender charges are minimal; and three, continuing the policy. This information will be available in your policy contract.
Typically, in the first few years of an insurance, it is better to continue. Surrendering makes more sense towards the end of the policy term.
I have to two life insurance policies. When I die, can a claim be made on both?
—Rajesh Chaturvedi
Yes. While applying for the second insurance policy you should have disclosed the first. If you have not, then do so now.
This is not the case in health insurance where you can claim hospitalization costs only from one insurance.
I have diabetes but all my medical parameters are in control. I had applied for an online term plan and the insurer has loaded my premium by 50% because of diabetes. Should I buy this?
—Vaibhav D.
I recommend that you accept the offer and buy this plan. In diabetes cases that I have seen, premiums were increased between 50% and 150%. In that sense, a 50% increase in premium is probably the best offer you are likely to get.
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